The Next Big One
Where America is most vulnerable and how the nation can better manage the risks ahead.

USA (BusinessWeek) September 9, 2005 - Dr. Irwin E. Redlener is in Baton Rouge, La., setting up mobile medical units. He has been in Louisiana and Mississippi for many long days helping people deal with the horror of Hurricane Katrina, and his voice is full of anger and despair. "The country is really just not prepared for a major catastrophic event," says the director of the National Center for Disaster Preparedness at Columbia University's Mailman School of Public Health. "Whatever it is - the Big One in San Francisco, a terrorist attack - it doesn't matter. The unfortunate truth is our ability to imagine and plan for catastrophic disasters is woefully inadequate."

For the moment, the nation's economy appears to have dodged the disaster bullet. Repairs to refineries and pipelines are under way, gas prices are coming down, and overall growth continues to be strong. With government and private funds pouring into Louisiana, Mississippi, and Alabama, that region should recover over time. The same can't be said of relations between Washington and state and local officials who are still battling over responsibility for the flooding and looting in New Orleans. As criticism over the slow federal response rose like the area's floodwaters, the White House responded with leaked reports of local bumbling. That had Democratic Senator Mary Landrieu of Louisiana fuming on ABC-TV's This Week that "if one person criticizes our sheriffs or says one more thing - including the President of the United States - I might likely have to punch him. Literally."

Yet, the political recriminations show that even as we approach the fourth anniversary of the September 11 terrorist attacks, the nation remains divided on what to do when terrible things happen. We still have difficulty grasping the notion that we are not safe from disaster in our own country. We couldn't imagine a foreign terrorist attack on our soil. It happened. We couldn't imagine an entire city disappearing under water, its population evacuated - but too late. It happened. We must begin to imagine future disasters, perhaps multiple catastrophes, for they, too, may well occur. It is no accident that this is precisely the conclusion that the 9-11 Commission reached in analyzing the attacks on the World Trade Center and the Pentagon. "The most important failure was one of imagination," it said.

However much we want to believe it, New York and New Orleans are not unique events. The Next Big One is almost certain to come, and soon, perhaps in the form of an earthquake in California, an avian flu pandemic starting in Chicago, or a dirty bomb in Washington or Manhattan. Homeland security experts have identified a wide range of grave risks.

We know this because an enormous amount of information flowing through our political and civil organizations already reveals these risks - just as data existed to foretell the New Orleans and New York disasters. In these two events and in others (the Challenger and Columbia shuttle accidents and the breakdown of the electric grid in the summer blackout of 2003), the issue wasn't information. Problems emerged because of deeply flawed organizations beset by poor management, siloed cultures, and inadequate communication. People could not deal with what they believed to be remote, low-probability, high-risk catastrophes even when confronted with irrefutable data.

In the business world, disruptive innovations and events occur frequently. CEOs and companies get blindsided for the same reasons. The Internet, China, startups, and surging oil prices are just some of the surprises in recent years. But the consequences of these kinds of shocks are limited to a hit to the bottom line, unemployment, and falling share prices. The stakes during a terrorist attack or natural disaster are vastly higher.

There's no way to be sure, but a confluence of trends appears to be raising the frequency, magnitude, and costs of many killer risks. Global integration is bringing everything and everybody closer faster, from technology to terrorists, visitors to viruses. Potential proliferation of small biological, nuclear, and chemical weapons is making security more difficult. Whatever the cause, the earth is warming, making much of the weather more ferocious. The U.S. appears vulnerable today to a growing number of potential disasters. Avian flu alone threatens to kill millions. It's a scenario people find difficult to absorb, let alone act on. Yet even though any one disaster is unlikely, the growing number of possible catastrophes raises the likelihood that at least one of them will strike.

The good news is that preparing for one disaster prepares for all of them. Planning relies on the same infrastructure and organizations. People are reluctant to pay to prepare for an unlikely event that may happen once in a lifetime. Paying for the possibility of a series of different unlikely events seems to make even less sense. A new approach to both terrorist and natural disasters may work better: Allow cities to deal with all contingencies at once by using the same infrastructure. Pioneered by the State University of New York at Buffalo's Multidisciplinary Center for Earthquake Engineering Research, this approach to multiple hazards is being used in California to "enhance the resilience of the critical infrastructure that communities will need," says director Michel Bruneau. "The three most important things are power and water, acute-care facilities like hospitals, and response-and-recovery capabilities." Strengthen these three, and you are better prepared to deal with almost all eventualities.

Here is what should be done to manage the nation's risks and prepare for the worst.

PAY FOR REDUNDANCY

We live in a private, hyper-efficient, just-in-time economy with no slack built into it. But dealing with catastrophe requires just the opposite - extra capacity and backup. Cell-phone communications failed in both New York and New Orleans in part because there was little backup built into the systems. Telecom players have no profit incentive to provide extra capacity to deal with emergencies. So Washington has to either provide financial incentives for companies to build spare capacity or pay for it directly.

The same just-in-time problems apply to hospitals, medical supplies, and vaccines. There are few stockpiled beds and medicines to deal with catastrophes. Access to cipro to fight anthrax and smallpox vaccines remains limited. A medical cushion is needed. "Communities have to have a surge response in hospitals," says Dr. Redlener.

PRIORITIZE SPENDING

The federal government already spends billions annually on Homeland Security, public works, and public health to defend against disasters, but it is not focused on areas of greatest threat. The democratic political culture that so defines America also acts to dilute resources across 50 states. Congress is pouring money into Wyoming to defend against terrorist attacks that are far more likely in San Francisco or Washington. It is sending millions of dollars to Alaska to build bridges to tiny islands that could have gone to bolstering the levees of New Orleans.

The political game of buying off legislators to build a consensus around bills makes little sense when preparing for disasters. Less pork and more focus of the billions already appropriated in Congress to supporting bulwarks against disaster would make the nation safer.

REORGANIZE THE ORGANIZATIONS

Establishing clear lines of authority in case of disaster before disaster strikes is equally important. New York had them. New Orleans didn't. U.S. Appeals Court Judge Richard A. Posner, author of Catastrophe: Risk and Response, says each locality and state must work out a compact with federal authorities beforehand. "There's urgency, uncertainty, people running around like chickens without heads - you have to have one person in command, with staff and authority," says Posner. Why did it take four days for the National Guard to enter New Orleans?

Acting on information that falls outside the expected is also important. The FBI agent who warned about terrorists in flight schools, the engineers who asked for photos when the space shuttle's wing was hit by foam, the people who wrote reports of problems with New Orleans' levees - all were signaling disaster, and all were ignored by decision makers who couldn't, or didn't want to, imagine what they foretold.

The economic cost of September 11 was $70 billion. The tab for the New Orleans flooding could top $200 billion. An avian flu pandemic could cost trillions. We are quickly learning the costs of not managing the risks of disaster. Spending to prepare for worst-case scenarios may be far cheaper.

But much depends on our political culture. In the past America's political system has chosen to react to rather than plan for catastrophe. Politicians reflected the fears and reluctance of their constituents to grapple with disaster. New Orleans and New York show that it is time for them to begin to inform those they represent of the real risks that lie ahead and the real costs of preparing for them. It may be that people are finally ready to hear that message. What must be done is already clear. Getting there quickly is the challenge ahead.